Embattled BT boss hints at sale of stake in its broadband infrastructure arm Openreach
BT is considering selling a stake in its broadband infrastructure arm Openreach.
Chief executive Philip Jansen said a deal could be on the table next year once a regulatory review into full-fibre broadband networks finishes.
Speaking at an industry conference, the telecom group’s boss said: ‘Would I be open-minded about looking at a minority interest on it, moving that on to somebody else? Possibly. I can’t see us doing that until well after we’ve agreed the regulatory framework, which isn’t until March, April next year.’
BT chief exec Philip Jansen said a deal to sell a stake in Openreach could be on the table next year once a regulatory review into full-fibre broadband networks finishes
Jansen’s comments mark the first time BT has publicly admitted it could look to sell a stake in Openreach.
It previously downplayed media reports it was in talks for a deal that could value the broadband division, which is responsible for rolling out full-fibre broadband across the UK, at £20billion.
This valuation would dwarf BT, which is legally separate from Openreach and is worth just £12.1billion.
Its share price has tumbled by more than a third this year and closed down 4.5 per cent, or 5.7p, to 122.3p yesterday. It is now worth less than it paid to buy mobile network EE in 2016.
Telecoms regulator Ofcom is reviewing how much BT should be able to make on its huge investment into broadband infrastructure.
Jansen has committed £12billion to rolling out superfast fibre broadband to 20m homes across the country – and has even suspended the company’s dividend to fund it.
Analysts have speculated that private equity groups could be interested in buying into Openreach – KKR bought an £890million holding in Italy’s Telecom Italia over the summer.
A City source said: ‘It’s not the biggest surprise to the market that this is being considered.
‘Let’s face it, BT is fighting on many fronts – it works in broadband, mobile, broadcast, it has a big pension deficit and plenty of debt. So you could understand why it might look to find a way of bringing in some cash.’